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3 Of The 5 Richest People In The World Are Making New Plays In The Real Estate Market

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Real estate has long been considered a lucrative investment option for building wealth, and some of the world’s wealthiest individuals are no strangers to this fact.

In fact, three of the five richest people in the world are currently making unique plays in the real estate industry. From buying up vast swaths of land to investing in cutting-edge technology, these billionaires are setting themselves apart in a field that has been a cornerstone of wealth creation for centuries.

Warren Buffett

Legendary investor Warren Buffett is betting on a strong housing market recovery. His recent purchase of 1.25 million shares in Louisiana-Pacific Corp suggests he believes the housing market has bottomed out.

Berkshire Hathaway’s latest SEC filing reveals a 7% stake in the homebuilding solutions company, worth $417.1 million, indicating Buffett sees value in the firm, which could see growth as the housing market recovers.

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This latest move underscores Buffett’s commitment to investing in companies that stand to benefit from long-term trends, such as the growing demand for housing in the coming years.

With his track record of successful long-term investing, his bet on the housing market could be a positive sign for the sector, the broader economy and the individual investor since new companies have made it possible to gain exposure to the real estate market with minimal capital.

If Buffett’s bet is right, a $100 investment (or more, depending on your appetite) in a rental property could prove to be a smart play.

Jeff Bezos

Amazon.com founder Jeff Bezos is no stranger to investing in the housing market either — he backed a company that allows investors to purchase shares of single-family rentals in up-and-coming neighborhoods for as little as $100.

The Bezos-backed company, which had other investors including Uber Technologies Inc CEO Dara Khosrowshahi and Salesforce Inc Co-CEO Marc Benioff, purchases properties with the highest appreciation potential, which are then listed online where nonaccredited investors can purchase shares with a single click to earn passive income through rent while their shares appreciate in value.

Elon Musk

Mostly known for his electric car company Tesla, space exploration company SpaceX and his recent acquisition of Twitter, Elon Musk has his eyes set on a new income stream deriving from real estate.

Musk could be partnering with the construction firm, Lennar Corp to build a residential area for employees of his companies.

The project, dubbed “Project Awesome,” will consist of 110 homes in Bastrop County, Texas, near the Boring Company and SpaceX facilities. The subdivision has already been approved for development and will address the growing need for housing in the area due to the thousands of jobs created by Musk’s companies.

This article 3 Of The 5 Richest People In The World Are Making New Plays In The Real Estate Market originally appeared on Benzinga.com

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Billions of dollars in commercial real estate loans are due; here’s why you should care – KARE11.com

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Billions of dollars in commercial real estate loans are due; here’s why you should care  KARE11.com

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How distress in office real estate could ripple out into the markets – Axios

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Animated illustration of a desk out in the desert with a tumbleweed blowing by.

Illustration: Sarah Grillo / Axios

Office vacancies — plus the still simmering banking crisis — have us considering what a potential bust in the $6 trillion U.S. office property market might mean.

Why it matters: A deep downturn in property values is more than a problem for oligarchs, feuding billionaire clans and oil-rich foreign wealth funds.

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State of play: Office utilization is still low compared to the before-times, with WFH and hybrid set-ups now standard for millions of former office drones.

By the numbers: Nearly 30% of companies still have remote or hybrid options — though that’s come down from 40% in 2021, the latest government data shows.

  • Utilization — how many people actually use the offices that their companies rent — is down roughly 50% from pre-COVID levels, according to swipe-card systems operator Kastle Systems.
  • Office building appraisal values were down 25% in February compared to a year prior, according to a Goldman Sachs note that cites research shop Green Street.
  • Office rents — especially in large cities with lengthy commutes — have fallen, too.

The latest: Signs of stress are picking up, with delinquencies on commercial office mortgages touching 2.4% in February, up from 1.5% six months ago, according to Trepp. Defaults are starting to appear as well.

The impact: The value of commercial property produces anywhere between 20% and 40% of tax revenues for states and localities.

  • If those revenues fall, governments will have to cut services, raise taxes, or both, making cities less attractive.

Meanwhile, smaller banks are big lenders to real estate developers, putting them at risk if office defaults spike.

  • Goldman Sachs analysts estimate that banks hold roughly half of the $5.6 trillion in commercial property mortgages outstanding, with the overwhelming majority of that half held at small banks.
  • Many of those same regional banks have been under pressure since Silicon Valley Bank failed. With deposits migrating to larger institutions — or simply to higher-interest accounts like money markets — they’ll have less capacity to refinance loans on office properties.

  • Property loans typically need to be refinanced every five to seven years — and failure to refinance or pay off the loan can result in a default. When that happens, the debt gets renegotiated, and the lender often takes losses.
  • If defaults pile up, it could worsen the pressure on office building values and make banks leerier of making office loans — exacerbating the defaults and the banks’ losses.

Finally, pension funds have also sunk billions into real estate in recent years. The top 200 institutional managers owned about a half-trillion worth of real estate in 2022, according to trade publication Pensions & Investments.

  • “How those real estate portfolios of buildings are doing, will then affect, in the end, returns which these pension funds are getting. And that will also affect households which are dependent on these pension funds,” says Vrinda Mittal, a Ph.D. candidate in finance and economics at Columbia Business School who has studied private real estate investments.

The bottom line: We’re still in the early stages of the post-COVID era for offices, and how it will shake out is the trillion-dollar question.

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B.C. real estate: 2 resort properties on sale for $8.25M

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A pair of sprawling resort properties in B.C. – complete with a hotel, ski runs and lifts, lakefront cabins, a campground, and a pub – are on sale for less than the price of some Vancouver tear-downs.

Colliers has listed the Powder King Ski Resort and its “sister property” The Azouzetta Lake Resort for $8,250,000. It’s being billed as a “once in a lifetime opportunity” to purchase the two properties, which are located at the base of the Pine Pass in Northeastern B.C.

The properties are remote, located 67 kilometres east of Mackenzie and 195 kilometres north of Prince George.

This image from an online listing by Colliers shows a resort property for sale in Northeastern B.C. (Image credit: collierscanada.com)

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The ski resort, according to the listing, has been rated number 1 for snow in Canada, getting an average of 12 metres of snowfall each winter. In total, there are 364 hectares of skiable terrain, comprised of 37 runs serviced by three lifts.

Accommodations at the ski resort include a 50-room hotel, two cabins for staff, a lodge with a licensed pub and a cafeteria. The possibility for expansion is built in, the online listing says, noting the resort has a master plan with the province.

“There is a three-phase development plan which allows for land acquisitions, real estate development, commercial development, ski runs, lifts, and summer recreation activities,” the realtor’s website says.

This image from an online listing by Colliers shows a resort property for sale in Northeastern B.C. (Image credit: collierscanada.com)

The second resort is roughly six kilometres away from the ski resort, situated on the “pristine,” 340-acre Azouetta Lake. The property includes several rustic but fully equipped A-frame cabins, RV sites, a campground, and on-site accommodations for a manager.

“The lake supports rainbow trout and an array of natural wildlife as well as numerous recreational opportunities such as kayaking, canoeing and boating as well as mountain biking, hiking, and other pursuits nearby,” the description from Collier’s says.

This image from an online listing by Colliers shows a resort property for sale in Northeastern B.C. (Image credit: collierscanada.com)

The property also has a gas station, a convenience Store and a restaurant called Café 97 which is open seven days a week, year-round.

A video tour of the property shows more of what it has to offer.

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